The 2020 Financial State of the States report surveys the fiscal health of the 50 states prior to the coronavirus pandemic. This data is released today by Truth in Accounting (TIA), a think tank that analyzes government financial reporting.
How large could the shortfall in state government general revenues be, amidst the coronavirus and related crises?
The U.S. Tax Cuts and Jobs Act enacted at the very end of 2017, which limited the deduction of state and local taxes to $10,000, has focused attention on the vast differences among municipal levies.
In the worst-case scenario, if Birmingham officials continue to ignore the Retirement & Relief Pension Plan, unfunded liabilities could ultimately drive the city into bankruptcy.
“The City of Birmingham’s general obligation bond rating and issuer default rating (IDR) was downgraded … Fitch views the city’s underfunding of the pension as a form of deficit financing or liability deferral that creates larger future obligations on the city’s operating budget. … The Fitch report said ‘the city’s solid revenue framework and healthy fund balances” supports the A+ rating.’” (Note: downgraded to an A+. Hmm.)
“…It is clear that partial pension reform will not be sufficient to meet these liabilities. Our study points to several avenues for structurally reforming the RSA, including successful reforms implemented in Utah and Michigan. While legislators cannot – and should not – change obligations already incurred, they can reform the pension system for future employees and offer current employees the voluntary option to transition to a new system.”
“Alabama's employee pension fund, with nearly 360,000 members and some $44 billion in managed assets, has become sole owner of one of the largest chains of local U.S. newspapers, the company said Thursday. … Financial details weren't announced. … Alabama's pension fund has other non-traditional investments including golf courses, airliners and the largest office building in New York City, 55 Water.”
For localities worried about facing big bond-market penalties if they go bankrupt, consider Jefferson County.
The filing deadlines for candidates to enter state legislative races have already passed in 31 states.
Look, employees can’t be fully shielded from the risks borne in a pension plan. It’s not feasible.
The Pennsylvania Department of the Auditor General is tasked with keeping track of more than $30 billion a year in state spending.
Voters worried that Congress and the White House can't tame federal borrowing may be overlooking another big debt bomb closer to home.
Ultimately, Ambac and FGIC went bankrupt, despite their AAA ratings.
Two cable news stars broadcast a repulsive but revealing display of self-promotion Aug. 10 when MSNBC host Lawrence O'Donnell credited fellow anchor Rachel Maddow for coverage prompting the resignation of Alabama's scandal-ridden governor earlier in the day.
Wouldn't a constitutional amendment be necessary for prison construction bonds?
He's not the governor. He's not a lawmaker. But thanks to the way he runs his state's pension plans, David Bronner may be the most powerful man in Alabama.
While state leaders have begun to pay more attention, Alabama's taxpayers have not yet come to grips with the high cost of the state's public pensions.
The haze of misinformation surrounding the debate often obscures the reality: the state has at least a $15 billion funding gap that will not be closed until 2050, at the earliest.
Enacted state budgets for fiscal 2016 represent a sixth consecutive year of spending and revenue growth, according to this report.